Correlation Between Agree Realty and Ventas
Can any of the company-specific risk be diversified away by investing in both Agree Realty and Ventas at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Agree Realty and Ventas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agree Realty and Ventas Inc, you can compare the effects of market volatilities on Agree Realty and Ventas and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Agree Realty with a short position of Ventas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and Ventas.
Diversification Opportunities for Agree Realty and Ventas
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agree and Ventas is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Ventas Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ventas Inc and Agree Realty is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Agree Realty are associated (or correlated) with Ventas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ventas Inc has no effect on the direction of Agree Realty i.e., Agree Realty and Ventas go up and down completely randomly.
Pair Corralation between Agree Realty and Ventas
Considering the 90-day investment horizon Agree Realty is expected to generate 2.76 times less return on investment than Ventas. But when comparing it to its historical volatility, Agree Realty is 1.32 times less risky than Ventas. It trades about 0.03 of its potential returns per unit of risk. Ventas Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,064 in Ventas Inc on August 28, 2024 and sell it today you would earn a total of 2,256 from holding Ventas Inc or generate 55.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agree Realty vs. Ventas Inc
Performance |
| Timeline |
| Agree Realty |
| Ventas Inc |
Agree Realty and Ventas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agree Realty and Ventas
The main advantage of trading using opposite Agree Realty and Ventas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty position performs unexpectedly, Ventas can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ventas will offset losses from the drop in Ventas' long position.| Agree Realty vs. Federal Realty Investment | Agree Realty vs. Regency Centers | Agree Realty vs. Netstreit Corp | Agree Realty vs. Kimco Realty |
| Ventas vs. Healthcare Realty Trust | Ventas vs. Healthpeak Properties | Ventas vs. Universal Health Realty | Ventas vs. Global Medical REIT |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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